Fairmount Santrol Holdings Inc. | $FMSA Stock | Shares Crash Down On Poor Earnings & Revenue Numbers


Fairmount Santrol Holdings Inc. (NYSE: FMSA)



Fairmount Santrol Holdings Inc. (FMSA), a proppant solutions company yesterday reported their preliminary second quarter 2016 financial results. Fairmount reported that they expect second quarter earnings to be in between a loss of $0.56 to $0.58 per share which fell short of analyst expectations of a loss of $0.12 per share. Fairmount reported expectations of revenues to be in between $113 and $115 million which fell short of analyst expectations of $135.26 million.


Fairmount Santrol Holdings Inc. CEO’s Comments

Jenniffer Deckard, President and Chief Executive Officer, said, “While we have continued to improve our efficiencies and reduce our costs, market conditions for our Proppant Solutions segment remained particularly challenging in the second quarter, including an estimated 25% sequential decrease in quarterly average U.S. rig counts. Consequently, we experienced additional pressure on both proppant volumes and pricing.

“During the second quarter of 2016, we invested in several areas to further improve our cost structure for the coming quarters, which we estimate will deliver annual cash savings of between $20 million and $25 million. These anticipated savings are in addition to our previously reported cost reductions,” Deckard continued.

“As we finalize our restructuring and move into the second half of 2016, we are also encouraged by the early signs of improvement we are seeing in the proppant market, including a progressive rebalancing of hydrocarbon supply and demand, oil prices in the $45 – $50 / bbl. range over a sustained period of time, rig count additions in the latter half of the second quarter, draw-downs on the inventory of drilled but uncompleted wells, the continued trend of increasing proppant volumes per well, and the reviving of well designs using resin-coated proppants.  In addition, our Industrial and Recreation business continues to deliver solid performance.  While the market remains unpredictable in the near term, we continue to believe Fairmount Santrol is well positioned for the eventual recovery,” Deckard concluded.  Globe Newswire


FMSA Technical Analysis

Fairmount Santrol Holdings

FMSA opened trading yesterday at $8.24 which was up from the previous days trading of $8.06. FMSA closed trading yesterday at $8.12 and spiked down after market to $7.10, equivalent to a 13% decrease from the closing price. Taking a look at the daily chart we can see the last time FMSA traded below these levels was on June 27th when it traded at $6.88. Taking a closer look at the daily chart we can see that FMSA has been on an overall upward trend dating back to January 20th when it traded at its 52 week low price of $1.00. FMSA has a float of 71.84million shares and traded below the normal daily trading volume on Thursday. For trading purposes, I would like to see FMSA open trading on Friday below $7.45  and if it does I would be looking to take a short position at the bell. My stop loss would be $0.15 from my entry position fearing anything more than that and the stock would start to fill in the gap down.


Company Profile

Fairmount Santrol Holdings Inc., together with its subsidiaries, provides sand-based proppant solutions for exploration and production companies to enhance the productivity of their oil and gas wells. The company operates in two segments, Proppant Solutions; and Industrial & Recreational (I&R) Products. The Proppant Solutions segment primarily provides sand-based proppants for use in hydraulic fracturing operations in the United States, Canada, Argentina, Mexico, China, Northern Europe, and the United Arab Emirates. Its products include northern white frac sand, API-spec brown sand, and resin coated proppants, as well as ceramic proppants; PowerProp product; and Propel SSP product that utilizes a polymer coating applied to a proppant substrate. The I&R Products segment offers raw, coated, and custom blended sands for use in building products, glass, turf and landscape, and filtration industries, as well as for foundries primarily in North America. Fairmount Santrol Holdings Inc. also supplies proppants to oilfield service companies. The company was formerly known as FMSA Holdings Inc. and changed its name to Fairmount Santrol Holdings Inc. in July 2015. Fairmount Santrol Holdings Inc. was incorporated in 1986 and is headquartered in Chesterland, Ohio.  Yahoo Finance